From: Subject: Date: To: Cc:

Daniel Charles McShan [email protected] Re: Reference Technologies, Inc. / Termination of Consulting Agreement July 13, 2015 at 10:01 AM Morr, Matthew A. (Denver) [email protected]

Hello, Mr. Morr, welcome aboard! I am pleased to see that Mr. Bishop has retained some counsel in this matter. I have tried to avoid legal action because of the significant negative impact it would have on RefTek in public relations, investors and customers - not to mention cost. And, other than them not paying me, I still quite like them and want the best for them. I believe I understand the intent of your letter, but I do have some questions about some of the legal details that hopefully you can clarify for me to help us decide our path forward. 1. Pursuant to the NDA, what INFORMATION would Reference Technologies not like us to disclose or reuse? Nothing was ever marked or mentioned as proprietary or confidential. Especially as the vehicle has been public shown, I do not believe that we are in possession of any non-disclosable INFORMATION. Please advise. 2. Also, Mr Bishop claims to have some patent applications covering some of the work that we have performed. Would it be possible to get a copy of them (or at least a description of them) so that we do not infringe on his invention going forward? 3. Since Reference Technologies terminated the time and materials contract, does that alleviate them from paying invoices for work already performed? For example, if you are representing RefTek and they terminate their contract with you, do they not owe you for the work you’ve already done? Even if they don’t like it because your font is wrong in your correspondences or something trivial? I appreciate that in case of a “material breach” this may not be the case. 4. What, exactly, is the definition of “material breach”? To my non-legal understanding, a material breach is one that strikes at the heart of the contract. In this situation, we have clearly delivered fully functional flight and ground control products. The complaint was the apparent inability to scale a gauge. I have personally not even seen evidence of this problem, but it was remedied within a day. To me this hardly meets the criteria for a “material breach”. In fact, as it was so easily remedied, it seems not to be a breach at all, but rather normal work progress. A material breach would be if we did not deliver anything, or if Reference Technologies refused to pay us despite obviously receiving products and services. 5. Does RefTek want the ground control system we have improved on subsequent to termination (with the scalable gauges)? I have offered to install the software for them, and made it available for download. It would seem that Mr Bishop is uninterested. This leaves the observer with the impression that he is simply unwilling to honor the contract he has signed, perhaps motivated by the fact that he has realized that his vehicle is going to cost him a lot more because he designed it wrong, ignoring our physics analysis. The fact that he catastrophically broke the vehicle the day before he terminated the contract lends great credence to this hypothesis. 6. Can you send me the original specifications and acceptance criteria for the deliverables? I do not have any product specifications before contract termination. I have a few versions afterwards, but they are a bit all over the place and very much seem to be simply trying to “move the finish line” as they include concepts and technologies that were never previously mentioned and are well out of scope for the original contract. 7. Regarding making disparaging comments about RefTek and Allen… is it disparaging if statements made are true? I have no intention of making false or misleading claims about Allen or his product and have avoided saying anything negative at all on several occasions with my many colleagues in the industry. I can imagine that if I tell my colleagues that Allen did not pay us, this certainly might dissuade them from doing business with him and be injurious to RefTek. But, to my mind, that is not disparaging, it's a fact. Likewise, when they ask me about the physics of the vehicle, I have thus far declined to answer. That said… 8. Is physics disparaging? Hypothetically speaking, lets say that I have interest in publishing and promoting a web based tool that makes the physics of multirotors easier to comprehend in hopes of preventing future investors and customers from making similar mistakes believing in ridiculous published claims of 10 hours flight time and 50 lb payload. Such a tool would be an excellent use of the physics based simulation in Simulink we have developed and RefTek has refused to pay for. It allows the user to assemble and arbitrary geometry of rotors, allow for battery and fuel weight and capacity, as well as payload capacity and then compute the momentum theory based lift and power for it. Such a tool would easily and obviously make it clear that the RefTek vehicle is entirely impractical and should not be pursued by any investor or customer. To my mind this is not disparaging - it's physics. 9. Is RefTek really willing to endure a lawsuit? Lawsuits are not good for investors, customers or public relations. Especially ones that blatantly reveal the unpleasant physics of the situation. Regardless of who brings the lawsuit, RefTek will be shown to have willfully ignored and foolishly mocked the sound physics analysis of expert consultants and blatantly lied to investors, the media and potential customers about his vehicles performance. A lawsuit bringing this to public attention would ruin them and destroy any chance they might have to be taken seriously in this nascent industry. Perhaps physics can be disparaging. 10. Would RefTek prefer to settle for the amount invoiced and some semblance of good will or should I instruct our attorney to sue for the full value of the contract plus damages? Our case is extremely well documented and obviously strong on its merits - we demonstrably performed services, demonstrably delivered products, and demonstrably expended vast efforts to remedy even after contract termination. My company has suffered excessive damages well above the unpaid invoices due to the unexpected and strangely protracted nature of it’s termination. We are desperate and are not in a position to agree to "move on”. Thank you for your time, and I look forward to your responses. Sincerely, Dan McShan Syzygyx, Inc 720-635-9842

On Jul 10, 2015, at 4:20 PM, Moses, Katsiaryna H. (Denver) wrote:



Good Afternoon Mr. McShanOn behalf of Matthew A. Morr, I attached a letter in the above referenced matter. Thank you. Katya H. Moses Legal Administrative Assistant Ballard Spahr LLP 1225 17th Street, Suite 2300 Denver, Colorado 80202 Phone: 303.382.5109 Fax: 303.296.3956 [email protected]| www.ballardspahr.com